Punjab National Bank - Quarterly/Annual Result Disclosures and Notes dated 30 Jun 2024
Auditor and Management Disclosures and Notes for the quarterly results dated 30 Jun 2024
Notes forming part of Reviewed Standalone and Consolidated Financial results for the quarter ended June 30, 2024:
1. The above financial results have been reviewed by the Audit Committee of Board and approved by the Board of Directors in their respective meetings held on July 27, 2024. The same have been subjected to limited review by the Statutory Central Auditors of the Bank, in line with the guidelines issued by the Reserve Bank of India and as per the requirements of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended thereafter.
2. The financial results of the Bank have been arrived at after considering provisions for non-performing assets, standard assets, restructured advances, stressed sector accounts, standard derivative exposures, direct taxes including deferred tax, unhedged foreign currency exposure and investment depreciation on the basis of extant guidelines issued by Reserve Bank of India and applicable accounting standards issued by The Institute of Chartered Accountants of India. Other usual and necessary provisions (including provision for employee benefits) for the quarter have been made on estimated basis and are subject to adjustments, if any, at the year end.
3. There is no material impact of changes in Significant Accounting Policies followed for preparation of financial results for the quarter ended June 30, 2024 as compared to those followed for the financial statements for the year ended March 31, 2024 except those pertaining to classification, valuation and accounting of investments in compliance of Master Direction No. RBI/DOR/2023-24/104 DOR.MRG.36/21.04.141/2023-24 on Classification, Valuation and Operation of Investment Portfolio of Commercial Banks (Directions), 2023 dated September 12, 2023, issued by Reserve Bank of India which have become applicable from April 1, 2024. Pursuant to the above guidelines, inter-alia, the Bank has recognised a net gain of Rs. 2,098.68 crore (net of taxes) in General Reserve. Additionally, as on June 30, 2024, net gain of Rs. 33.47 crore (net of taxes) is outstanding in the AFS Reserve.
To the extent of impact of these guidelines, the corresponding previous periods’ / year’s figures are not comparable with that of the current period.
4. The Consolidated financial results are prepared in accordance with Accounting Standard 21 on “Consolidated Financial Statements”, Accounting Standard 23 on “Accounting for Investment in Associates in Consolidated Financial Statements” and Accounting Standard 27 on “Financial Reporting of Interest in Joint Ventures” issued by the Institute of Chartered Accountants of India and guidelines issued by RBI.
5. The consolidated financial results of the Group comprise financial results of 5 Subsidiaries and 15 Associates listed hereunder. The consolidated results are prepared in accordance with RBI guidelines, section 133 of Companies Act, 2013 and regulation 33 of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.
Sl. No. Name of the Entity Type of Association Proportion of Ownership (%)
1 PNB Gilts Limited Subsidiary 74.07
2 PNB Investment Services Ltd. Subsidiary 100
3 PNB Cards and Services Ltd. Subsidiary 100
4 Punjab National Bank (International) Ltd., UK Subsidiary 100
5 Druk PNB Bank Ltd., Bhutan Subsidiary 51.00
6 PNB Metlife India Insurance Company Ltd. Associate 30.00
9 Canara HSBC Life Insurance Co. Ltd. Associate 23.00
10 India SME Asset Reconstruction Co. Ltd. Associate 20.90
11 Everest Bank Ltd., Nepal Associate 20.02
12 Dakshin Bihar Gramin Bank, Patna Associate 35.00
13 Himachal Pradesh Gramin Bank, Mandi Associate 35.00
14 Punjab Gramin Bank, Kapurthala Associate 35.00
15 Sarva Haryana Gramin Bank, Rohtak Associate 35.00
16 Prathama UP Gramin Bank, Moradabad Associate 35.00
17 Assam Gramin Vikas Bank, Guwahati Associate 35.00
18 Bangiya Gramin Vikas Bank, Murshidabad Associate 35.00
19 Manipur Rural Bank, Imphal Associate 35.00
20 Tripura Gramin Bank, Agartala Associate 35.00
* Under liquidation
6. In accordance to SEBI regulations, for the purpose of quarterly consolidated financial results, minimum eighty percent of consolidated revenue, assets and profits have been subjected to limited review.
7. As per RBI Letter no. DBR.No.BP.15199/21.04.048/2016-17 dated 23rd June, 2017 (RBI List-1) and Letter no. DBR.BP.1908/21.04.048/2017-18 dated 28th August, 2017 (RBI List-2) for the accounts under the provisions of Insolvency & Bankruptcy Code (IBC), where the Bank is having exposure, the Bank is holding total provision of Rs. 7982.36 Crore (Aggregate provision of RBI List 1 and List 2 accounts is 100%) as on 30th June, 2024.
8. During the quarter, the Bank has not availed any dispensation in respect of frauds in terms of option available as per RBI Circular No. RBI/2024-25/12 DOR.STR.REC.8/21.04.048/2024-25 dated April 02, 2024. Further, there is no un-amortized amount which has been carried forward to subsequent quarters.
9. In terms of RBI Circular DBR No. BP. BC 45/21.04.048/2018-19 dated June 7, 2019 on Prudential Framework for Resolution of Stressed Assets, having total banking exposure of Rs. 1,500 Crore and above, the Bank is holding additional provision of Rs.1,740.94 Crore as on June 30, 2024 in 17 accounts as detailed below:
(Rs.in Crore)
Amount of loans impacted by RBI Circular
(FB+NFB) Amount of Loans NPA as on 30.06.2024
out of (a)
(FB+NFB) Amount of loans NPA as on 30.06.2024 out of (b)
(FB) Amount of loans Standard as on 30.06.2024
out of (a) Total Additional Provision held as on 31.03.2024 Additional Provision / (Reversal) made during quarter ended 30.06.2024 Total Provision held as on 30.06.2024
10. In accordance with RBI circular no. DBR.No.BP.BC.18/21.04.048/2018-19 dated January 01, 2019, DOR.No.BP.BC.34/21.04.048/2019-20 dated February 11, 2020 and DOR.No. BP.BC/4/21.04.048/2020-21 dated August 06, 2020 on "Micro, Small and Medium Enterprises (MSME) sector – Restructuring of Advances", the summary of MSME restructured accounts as on June 30, 2024 is as under:
(Rs. in Crore)
No. of Accounts Restructured Amount involved
4244 599.77
11. In accordance with RBI circular no. DOR.STR.REC.12/21.04.048/2021-22 dated May 05, 2021 on “Resolution Framework 2.0 - Resolution of Covid-19 related stress of Micro, Small and Medium Enterprises (MSMEs)” the summary of restructured accounts as on June 30, 2024 is as under:
(Rs. in Crore)
No. of Accounts Restructured Amount involved
21737 1966.98
12. As per RBI Circular RBI/2022-23/19 DOR.AUT.REC. 12/22.01.001/2022-23 dated April 07, 2022, for the purpose of disclosure under Accounting Standard 17, Segment Reporting, Digital Banking Segment has been identified as sub-segment under Retail Banking by Reserve Bank of India (RBI). As on June 30, 2024, 8 (eight) Digital Banking Units (DBUs) of the Bank have commenced operations and the segment information disclosed as Digital Banking under Retail Banking Operations is related to the said DBUs.
13. As on June 30, 2024, the Bank is holding an additional provision of Rs.229.41 Crore (additional provision outstanding at end of previous quarter was Rs. 238.68 crore) towards the standard accounts restructured under COVID 19 Resolution Framework 1.0 and 2.0, at a higher rate of 12.50% as against the prescribed rate of 5%/10% based on the evaluation of risk and stress in these sectors, in terms of RBI Master Circular regarding Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated April 02, 2024.
14. The Bank has estimated the liability for Unhedged Foreign Currency Exposure (UFCE) in terms of Reserve Bank of India (Unhedged Foreign Currency Exposure) Directions, 2022, no. RBI/2022-23/131 DOR.MRG.REC.76/00-00-007/2022-23 dated October 11, 2022 and is holding a provision of Rs.175.54 Crore as on June 30, 2024 (Previous Year Rs.126.73 Crore).
15. The Provisioning Coverage Ratio (including Technically Written off accounts) as on June 30, 2024 works out to 95.90% (89.83% as at June 30, 2023).
16. In accordance with RBI circular no. DOR.STR.REC.51/21.04.048/2021-22 dated September 24, 2021, the details of loans transferred/acquired during the quarter ended June 30, 2024 are given below:
i. The Bank has not acquired any Special Mention Accounts (SMA) and also not transferred any loans not in default or Special Mention Accounts (SMA).
ii. Details of loans not in default acquired through pool buyout via assignment:
Particulars Values
Amount of Loan Rs.3392.28 Crore
Weighted average maturity 132.36 months
Weighted average holding period 26.82 months
Retention of beneficial economic interest (by originator) 10%
Tangible security coverage 222.50%
Rating wise distribution of rated loans NA
iii. The Bank has not acquired any non-performing assets.
iv. Details of non-performing assets (NPAs) transferred:
(all amounts in Rs. Crore) To ARCs To permitted transferees To other transferees
No. of accounts 2 Nil Nil
Aggregate principal outstanding of loans transferred 254.04 Nil Nil
Weighted average residual tenor of the loans transferred Nil Nil Nil
Net book value of loans transferred (at the time of transfer) Nil Nil Nil
Aggregate consideration 302.15 Nil Nil
Additional consideration realized in respect of accounts transferred in earlier years 90.11 Nil Nil
Quantum of excess Provision reversed to the Profit & Loss account on account of sale of stressed loans 0.00 Nil Nil
Distribution of the SRs held across the various categories of Recovery Ratings assigned to such SRs by the credit rating agencies as on June 30, 2024:
Recovery Rating Band Face Value
(Rs. in Crore) Carrying Value*
(Rs. In Crore)
RR1+ 13.58 0.00
RR1 460.17 0.00
RR2 322.63 0.00
RR3 141.51 0.00
RR4 0.00 0.00
RR5 596.83 0.00
Unrated 1,815.79 417.88
Total 3,350.51 417.88
As per RBI guidelines, post 8 years Rating is not applicable.
* Provision of Rs.417.88 Crore is held against carrying value.
17. During the quarter ended June 30, 2024, the Bank redeemed Basel III compliant Tier II Bonds of Rs.500.00 Crore due to maturity.
18. Other income includes income (including commission) from non-fund based banking activities, fees, earnings from foreign exchange, profit/loss on sale of assets, profit/loss (including revaluation) from investments, dividends from subsidiaries, recoveries from accounts written off/technically written off, etc.
19. The Bank has evaluated the options available under section 115BAA of Income Tax Act, 1961 and opted to continue to recognise the taxes on income for the year ended June 30, 2024 as per the regular provisions of Income Tax Act, 1961. Further, the Deferred Tax has also been recognised as per Accounting Standard-22.
20. In terms of RBI circular no. RBI/2023-24/31 DOR.CAP.REC.15/21.06.201/2023-24 dated May 12, 2023, banks are required to make Pillar 3 disclosures under BASEL III capital regulations. Accordingly, Pillar 3 disclosures under BASEL III capital regulations are being made available on Bank's website i.e. www.pnbindia.in. These disclosures have not been subjected to limited review by the Statutory Central Auditors.
21. Details of Investors complaints for the quarter ended June 30, 2024: Pending at Beginning: Nil, Received: 08; Disposed off: 08; Closing: Nil.
22. The figures of the last quarter of the previous year are the balancing figures between audited figures in respect of financial year 2023-24 and the published year to date figures up to the end of the third quarter of the previous year.
23. Figures of the previous periods have been regrouped / rearranged / re-classified wherever necessary to conform to current period's classification.